Remember what I learned about infusing the business I’m planning with greater purpose than profit?
Well, Umair Haque has some pretty robust opinions on this subject. In fact, he advocates the restructuring of our entire economy for that kind of value creation on his HBR Blog. He invented a new word in a recent post and basically described what I hope to make of the company I start:
Forporation: Yesterday, Detroit, Madison Avenue, and Wall Street were powered by companies like…General Motors, General Foods, General Mills, and General Electric. Funny, isn’t it? But perhaps also telling: that’s “general” as in generic, commoditized, mass-made “product.” Today, we’re learning the hard way that “general” is, too often, the polar opposite of “meaningful.” So consider then, a radical idea: that the corporation as we know it just might be past its sell-by date, an obsolete tool that’s outlived its era.
Instead of creating new value, too many corporations merely transfer value from society to shareholders (consider, for a moment, the paradox of skyrocketing corporate profits versus record long-term joblessness, obesity, or carbon emissions). The problem isn’t, when you think about it, that corporations are dysfunctional. The problem is the very opposite: it’s that maximizing near-term profit, no matter what, is exactly what the modern corporation was made to do — and is bound to do.
Rebuilding our base of organizational capital means reinventing our most heavily utilized kind of organization, the corporation, to do bigger, better, more enduring things. How might we do it? By creating private-public partnerships to seed and invest new kinds of corporations. Consider the groundswell of states passing legislation for B corporations, a new kind of corporation which balances shareholder value and social returns, instead of prioritizing one over the other. Authentic prosperity depends on what I sometimes call “forporations”: more efficient, effective corporate forms “for” the pursuit of more meaningful, disruptive goals than just near-term financial gain; that exist “for” the benefit of more than just shareholders.
My friend Alec Williams mentioned in a recent conversation that TOMS Shoes might be an example of such a company; a business model which, from its very core, creates more value than a product for its customers and revenue for its shareholders.
That’s what I need to build. And I don’t mean writing some gushy addendum to a corporate mission statement about giving away a percentage of revenue to some related charity, or abstractly justifying the ways my product enriches the lives of our customers. Any business can do that. In fact, those that don’t already are laughably out of touch.
No, I need to build my business such that our second or third bottom line are the driving priorities of the organization; competitive differentiators in themselves.
I can’t reveal much yet but I plan to sell books online. Novel idea, right? (Pun intended.) How would you infuse a socially beneficial purpose into the core of a book retailer’s business model?